Wake Forest, N.C. — A former Wake Forest seminary student accused of running a multimillion dollar Ponzi scheme appeared in federal court on Wednesday to face a three-count criminal indictment.

Prosecutors say between 2005 and 2007 Trevor Reed and others defrauded more than 5,000 investors from all over the country through CEP Holdings, Inc. CEP websites promised and paid out returns of 60 percent a month through ad packs or auto-surfing, which drive up website traffic for money. Investigators said no ad money was coming in so returns were paid through new investors.

Records show once the plan imploded, investors lost anywhere from a few dollars to tens of thousands.

At the time of the scheme, Reed was studying at Southeastern Baptist Theological Seminary in Wake Forest.

Reed is charged with wire fraud and operating an unlicensed money-transmitting business. The counts carry a maximum of 20 years in prison.

The court now considers Reed indigent because he fired for bankruptcy. His attorney is court appointed.

Civil records show Reed, a Kentucky partner, and their families were found to have pocketed close to $1.5 million dollars of the money. Records show most victims received about 3 to 4 percent of their money back.